Acquisitions and Investments - Shineco Life acquired 51% of Changzhou Biowin Pharmaceutical Co., Ltd. for US$9,000,000 in cash and 13,583 shares of common stock[250]. - On September 19, 2023, Shineco Life closed the acquisition of 71.42% equity interest in Chongqing Wintus Group for US$2,000,000 and 41,667 shares of common stock[251]. - The company has divested its equity interest in Tenet-Jove, terminating its VIE structure[251]. - The company entered into a securities purchase agreement for the sale of 624,375 shares at $13.20 per share, totaling approximately $8.24 million, with $4.7 million received by December 31, 2024[263]. - A separate agreement was made to sell 15,000,000 shares at $2.18 per share, generating gross proceeds of $32.7 million, with shares issued on January 10, 2025[264]. Business Segments - The company operates three main business segments: rapid diagnostic products, agricultural products, and healthy meals, with products sold in multiple countries including Germany, Spain, and the United States[252][254][255]. - The Company has three major business segments: rapid diagnostic products, silk products, and healthy meals for metabolic health recovery[288]. - The company specializes in producing, processing, and distributing agricultural products, including silk and fresh fruits, with operations located in Chongqing, China[254]. - The company’s rapid diagnostic products are developed and distributed through its subsidiary Biowin, with operations based in Jiangsu Province[252]. Financial Performance - Revenue for the six months ended December 31, 2024, was $5,223,456, representing a 32.15% increase from $3,952,759 in the same period of 2023[287]. - Cost of revenue increased by 35.82% to $4,810,155, up from $3,541,486, resulting in a gross profit of $413,301, a slight increase of 0.49%[287]. - General and administrative expenses decreased by 40.12% to $5,300,198 from $8,851,375, contributing to a loss from operations of $5,028,988, a 41.65% improvement from the previous year[287]. - The Company reported a net loss from continuing operations of $4,847,811, a 43.43% reduction compared to $8,569,226 in the prior year[287]. - The net loss for the six months ended December 31, 2024, was US$4,847,811, compared to a net income of US$286,021 for the same period in 2023, indicating a significant decline in performance[315]. - Comprehensive loss for the six months ended December 31, 2024, was US$4,853,397, an increase of US$5,277,773 from a comprehensive income of US$424,376 for the same period in 2023[316]. Revenue Breakdown - Revenue from other agricultural products increased by $1,362,854, or 37.42%, reaching $5,005,387 in 2024, primarily due to increased sales of fresh fruits[291]. - Revenue from rapid diagnostic and other products decreased by $82,002, or 27.41%, totaling $217,120 in 2024, attributed to a decline in customer orders[289]. - Revenue from healthy meal products decreased by $10,155, or 91.45%, to $949 in 2024, due to low market acceptance and high maintenance costs[292]. - Revenue for the three months ended December 31, 2024, was US$3,049,171, representing an increase of US$742,269 or 32.18% compared to US$2,306,902 in 2023[318]. - Revenue from sales of other agricultural products increased by US$822,113 or 38.56% to US$2,953,916 for the three months ended December 31, 2024, due to increased sales of fresh fruits[322]. - Revenue from sales of rapid diagnostic and other products decreased by US$68,740 or 41.92% to US$95,255 for the three months ended December 31, 2024, primarily due to a decline in customer orders[320]. Expenses and Losses - General and administrative expenses decreased by US$2,928,287 or 52.37% to US$2,663,623 for the three months ended December 31, 2024, mainly due to the forgiveness of a subscription receivable[332]. - The loss from operations for the three months ended December 31, 2024, was US$2,638,595, a reduction of US$2,747,577 or 51.01% compared to US$5,386,172 in 2023[318]. - Net interest expenses decreased to US$185,524 in Q4 2024, down US$266,566, or 58.96%, from US$452,090 in Q4 2023[339]. - The benefit for income taxes was US$242,475 in Q4 2024, a decrease of US$464,087, or 65.68%, compared to US$706,562 in Q4 2023[340]. - Net loss from continuing operations was US$2,289,683 for Q4 2024, a decrease of US$2,766,420, or 54.71%, from US$5,056,103 in Q4 2023[341]. Cash Flow and Financing - Net cash used in operating activities for the six months ended December 31, 2024 was approximately US$2.7 million, with a net loss from continuing operations of US$4.8 million[371]. - Net cash used in investing activities for the six months ended December 31, 2024 was US$2.8 million, mainly due to prepayment for business acquisition of US$2.6 million[373]. - Net cash provided by financing activities for the six months ended December 31, 2024 amounted to approximately US$5.8 million, driven by proceeds from issuance of common stock of US$6.8 million[375]. - The Company had current assets of US$36.2 million and current liabilities of US$42.2 million as of December 31, 2024[362]. - The Company’s management believes that current access to loans and equity financing will be sufficient to meet working capital needs for at least the next 12 months[361]. Other Financial Information - As of December 31, 2024, the company had approximately US$14.0 million in short-term bank loans and US$1.7 million in long-term bank loans outstanding[349]. - The Company reported recurring net losses from continuing operations of US$4.8 million and US$8.6 million for the six months ended December 31, 2024 and 2023, respectively[361]. - As of December 31, 2024, the Company had accumulated a deficit of US$58.0 million and negative working capital of US$6.0 million[361]. - Working capital decreased by US$697,410, or 10.5%, from June 30, 2024 to December 31, 2024, primarily due to an increase in contract liabilities[362]. - The Company has no long-term fixed contractual obligations other than leases disclosed in the financial statements[365]. - The Company’s subsidiary provided a guarantee of US$685,076 for a bank loan borrowed by a related party until December 28, 2025[367].
Shineco(SISI) - 2025 Q2 - Quarterly Report